- 22 Nov
- Eric Hochberger
Ads.txt: Exposing Resellers
It’s been a few months since Ads.txt was announced, and the industry has been quick to adopt this new standard in fighting ad fraud. With that adoption, a lot has come to light.
If you’re unfamiliar with Ads.txt, I would recommend you read my original article introducing Ads.txt.
Just how much adoption has there been in the last few months? Some reports say as many as 44% of the top 10,000 sites have already adopted Ads.txt.
Part of this rapid adoption by the publishers on supply side is driven by advertiser requests on the demand side. One of the biggest names in advertising driving this? Google.
Google announced that as of November 1, Doubleclick Bid Manager would only buy inventory through authorized accounts on domains – in other words, domains that have an ads.txt and correctly list the correct Google AdExchange or Adsense ID for that domain.
As one of the largest DSPs (demand side platforms) driving this trend, Google’s hard stance has led our other ad partners to request they be added to our ads.txt file.
So what have we learned as these partners come knocking?
First off, some of these conversations went beyond email, and over the course of several presentations and phone calls, we learned something important and embarrassing:
It turns out we’ve been pronouncing Ads.txt all wrong. It’s the great GIF debate all over again (is it pronounced “JIF”?) and we don’t want to be on the wrong side of history.
So, for the record, it’s ads dot text, not ads dot tee x tee.
Okay, now that we’re all pronouncing things right, the second most interesting fact we’ve learned? Just how much more reselling goes on in this industry.
Although Ads dot text was launched as an initiative to stop ad fraud through sites falsely selling their impressions under someone else’s domain (think spammer.com listing their ad inventory on the exchanges as nytimes.com), it has exposed a secondary form of arbitrage.
I touched on this in my previous ads.txt blog post, but it’s a much bigger issue than I realized. In an ad tech industry loaded with middlemen, there is a money being wasted in the form of arbitrage.
The short version is middlemen buying your ad inventory for cheap, then selling it for more money. This has always gone on to a degree, but being on the supply side of ad tech, we’ve always ignored it (or even, in select cases) encouraged it.
Why? Because it meant more money short-term for the supply side; the middlemen were still buying our ad inventory and driving up short-term auction prices as they bid on it.
However, someone was ultimately paying for this – the advertiser – and paying more than they should at that. Those profits were going straight into the hands of a reseller.
So who are we referring to as a reseller in this model?
In a simplified version of our current ad tech world, an ideal ad transaction would look something like this:
Advertiser > Advertiser’s DSP > Publishers’s SSP > Publisher
However, with resellers, it ends up looking more like this:
Advertiser > Advertiser’s DSP > Reseller’s SSP > Reseller’s DSP > SSP > Publisher
Those extra two steps each come with transaction fees (anywhere from 10-20%) each time a purchase is made and profit is taken by the reseller. Assuming they want to make a decent profit, that’s likely 50% or more of the revenue that should’ve gone directly to the publisher from the advertiser.
Who are some of these resellers? We have to be careful with names here, but it turns out thanks to Ads.txt, they’re pretty easy to spot.
Scenario 1: The supposed buyer
If you follow industry news, you’ve likely heard about the Thrive+ fiasco. This was a supposed buyer of ad inventory that reached out to random publishers they were buying from and asked to be added to their ads.txt to continue buying. They asked for authorized IDs on major exchanges including Google, AOL and SpotX so they could continue buying on behalf of advertisers.
Sounds legitimate right? No.
If a buyer is going to buy on behalf of advertisers on your site, they’d simply use a DSP to buy for those advertisers on SSPs where you had a seat. That’s what demand side platforms are for.
What they’re doing here is asking for seats on the supply side. In other words, they’re simply reselling your inventory on the exchanges they ask you to list in your ads.txt.
Thrive+ got the most attention, but were far from alone among buyers asking us to add them to our ads.txt. We’ve seen partners that have been running in traditional tag-based buys and programmatic buyers in marketplaces arranging Deal IDs with us and asking to be added.
We’re wary of anyone labeling themselves as a buyer asking for you to list seller seats for them. If they’re not reselling, I’m not sure why they would need the ability to sell on your behalf.
Scenario 2: The supposed SSP
Over the past few months, many of our ad partners that we have labeled as SSPs or ad exchanges in the past have reached out to us to be added to our ads.txt.
That’s definitely legitimate, and the original idea behind Ads.txt. We should list exchanges and SSPs where our inventory is available, and list our ID on the exchanges.
However, that’s where things got very weird for us.
A majority of the second-tier SSPs have been asking us to add not just their exchange in our ads.txt, but THEIR IDs on OTHER exchanges in our ads.txt.
These other exchanges they were asking to be listed on? They were already in our ads.txt under our IDs, but these partners have been asking us to add their seats as well.
Why would a company with a direct connection to the DSP want you to add another SSP or exchange, with the connections to the same DSPs?
Simply put, they’re taking advantage of the inefficiencies of this market. Lots of big-name SSPs have exclusive demand, or at least DSPs that tend to favor them. So a smaller-name SSP will want to resell your inventory on those other SSPs to take advantage of that demand and take their cut.
However, if you’re big enough to work with these SSPs directly, like Mediavine is, you have to ask yourself why you want to list multiple seats on an exchange in your ads.txt.
If the reseller’s response is that you should do so because of PMP, or anything else, ask yourself why an advertiser should be working with them and not you directly.
That’s Mediavine’s take. If an advertisers wants to work with Mediavine, come work with Mediavine. We’re easy to find. Just email us at firstname.lastname@example.org. No reason to let a bunch of resellers take 50% or money of that money out of our publishers’ hands.
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